Mark Sinatra, the CEO of Staff One HR, grew his company’s revenue from $24.8 million in 2014 to $41.7 million in 2017, a 68% increase.
Staff One HR is an HR managed services company that provides PEO, ASO and recruiting services.
In this interview with Eversprint‘s Malcolm Lui, Mark shares how he and his team accelerated their high value sales by:
- Generating organic growth through service and retaining over 90% of their clients.
- Having a clear marketing strategy focused on attracting their ideal clients.
- Building their brand in North Texas via local partnerships and by engaging business groups and affinity groups.
Malcolm Lui: Welcome to the High Value Sales Show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with Mark Sinatra, the CEO of Staff One HR, an HR managed services company that provides PEO, ASO and recruiting services. Welcome to the call Mark.
Mark Sinatra: Thank you Malcolm appreciate it.
Malcolm Lui: Mark, you grew your company's revenue from $24.8 million in 2014 to $41.7 million in 2017, a 68% increase. Before we talk about how you grew your company so fast, can you briefly share what your company does beyond my quick intro, and how your company differs from the competition?
Mark Sinatra: Sure. Yeah. So what we do is we provide companies that typically don't have a comprehensive in-house H.R. department. We provide those companies with all of the services that they need from an H.R. perspective to grow and be successful. So specifically we provide them with H.R. consulting H.R. Compliance Services. We have an H.R. technology platform that we deploy to our clients as well. And then of course employee benefits the full range of employee benefits options and payroll processing. So it's really a comprehensive turnkey H.R. offering that again that that a company would need to to grow into to be successful in terms of how we're different. You know we really built the company to to have a boutique service model focused on the quality and depth of H.R. offerings because what we found was that that was really becoming an increasingly larger need in the market to have essentially real time on demand each our expertise. That wasn't you know Google or anything you could just type into a two you know a search engine you know they wanted a client wanted to talk to you know. An actual. Credentialed. Expert. And Consult with that person on H.R. advice and topics. So that's that's first and foremost as you know our our service offerings really been rooted in in H.R. but at the same time you know in addition to having that boutique feel right of of the service model we have the breadth and the depth of products that you know Fortune 500 companies would typically offer to their employees. So we use our technology platform you know a full range of medical dental vision life disability or one K benefit options. So it's really the best of both worlds in terms of the product category aligning with that of a Fortune 100 caliber type organization with the service of a boutique. So it makes sense
Malcolm Lui: It does now. Is there a target audience target market for Fortune 500 companies as well or you're looking at a different segment
Mark Sinatra: Never in another way. So in terms of our target clients to clarify we are sweet spot is really the companies that have between I would say 10 to a thousand employees. Right. So our largest client has close to a thousand employees. I'll tell you that our average client size is right around 30 to 40 employees. So that's that's how we we look at it from a client size perspective but really the two ideal clients and target clients to us first would be what we call the the H.R. neophytes of the world where it's it's an entrepreneur a business owner that has grown his or her company to the point when they they're having you know more and more of an H.R. need right from a day to day perspective answering questions implementing certain H.R. related projects you know recruiting hiring client employee retention things like that right into the business owner understands table they're at an inflection point when they need to either scale in build an H.R. department in-house or they need to partner with a firm like ours to do it. Deborah I know that H.R. support they need on a fairly you know much more cost effective basis and number two the second target group of clients that we focus on are companies that have already figured that out. Right. They're already using it in each our main IT services company but they just become disenfranchised you know with with the service that they're receiving and they they want you know again that more boutique feel of from a service provider and that's kind of where where we step in
Malcolm Lui: Right now. Oftentimes when I look at companies that provide H.R. services I see the acronyms PTO and ASIO. Can you explain what those two acronyms are.
Mark Sinatra: Oh sure. Yeah. I'll start with you know ASIO and in this context know what we're really referring to is administrative services only where we're providing all the services I just mentioned. You know payroll only benefits are things like that. But the the year the client is the employer record for all of the services. So they have their own benefits in their name. You know the payroll taxes are filed in the client's name. Right. As an example the PTO model right stands for Professional Employer organization and that's where the client in the PTO established that employment relationship where the PEO is the employer record for certain employer duties such as remaining payroll processing payroll remaining and filing payroll taxes providing certain insurance coverages things like that but the client is the day to day employer for all other purposes and aspects and really has that control and direction right over his or her employees.
Malcolm Lui: Okay. When would a company prefer one over the other
Mark Sinatra: Yeah that's a good question. I mean it. We've had companies that have all varying sizes that prefer BPO or array. So we haven't really seen a strong correlation there. I think I think the one thing I can say is when a client wants. I would say their own insurance coverage is for whatever reason maybe they are an oil and gas company and they have very unique worker's compensation requirements and they just want their own worker's comp policy. There may be a situation where they would prefer the the ASIO model. I will say you know for us the PEO model is certainly predominantly the largest service line accounts for about ninety two percent of our overall business. So that's that's really the majority of what we provide.
Malcolm Lui: Right. OK got it. So as a PEO you take care of the policy's and benefits and so on. And that's all done in-house or rather done in-house by your firm in the company just pays you a fee for you to deliver all those services whatever they may be
Mark Sinatra: Exactly and it's important that it's a one to note partnership right. So we can along junction and in partnership with our clients because as you can imagine and you know this by interviewing many different entrepreneurs and one company may have a different PTO policy they may have a different outlook on certain other policies. So you know we our goal is really as a consultant advisor to really ensure that they have for example like a handbook or job prescriptions and an overall each our philosophy that's that first and foremost supply. Right. Secondly it's consistent with their overall business philosophy and corporate culture.
Malcolm Lui: Right. Got it. Now your business grew pretty fast. Twenty five million in 2014 to forty two million in 2017 a pretty chunky increase almost 70 percent increase over over those three years. What were the three biggest drivers of that growth.
Mark Sinatra: Well the first is not sleeping not one of the inserts and some humor there but
Malcolm Lui: Right.
Mark Sinatra: We'll say you know it was a lot of work to get there by the team. Right. And that we have internally and the clients as well and everyone you know the vast majority about 85 percent of that growth was what I would call organic growth. So it was despite increasing sales and having high client retention the other 15 percent was do acquisitions. Right. So you know this industry the H R services sector is a very fragmented industry. And so we were opportunistic and we're able to do a couple acquisitions to really augment our revenue growth but to touching your question. The organic growth it. I would like to start you know the main driver for us was actually the service and the retention right. Because when you have you know client retention and service that's above 90 percent. Right. Year in and year out it just makes it that much easier to grow organically and at the same time that's what the salespeople are selling right. They're selling intangible to be servers right. They're selling the service model. They're selling the team members that are behind the deploying deployment service model. So if if this service level and the products are there and they are meeting and exceeding client expectations that is really the first level lever to growth. The second one is pending a very clear focus on who is our ideal client and how do we best impact their business. And then having a very aligned marketing strategy and communication that articulates that right. So we determined early on that the two target clients that I just mentioned to you before know those were two groups of target clients and we weaved in really I would say customized marketing messaging and campaigns to focus on those two specific groups. And I'm really referring to a lot of the digital marketing things that we did to help with our search engine optimization rankings. And to put out good quality content that helped with that. And then at the same time having the salespeople be disciplined and focused on those types of to target clients that I mentioned earlier so
Malcolm Lui: Right.
Mark Sinatra: No
Malcolm Lui: Okay
Mark Sinatra: Dog related
Malcolm Lui: Yep. And how about the third driver.
Mark Sinatra: Yeah you know I would say the third driver would be the the overall presence that we had in our local markets and specifically in North Texas. You know we we invested a lot in you know various like I would say you know association type partnerships affinity groups you know business owner groups and you know the benefit there was really twofold. First it helped proliferate our brand in the market so which ultimately you know this is the second benefit you know kind of trickle down into getting more referral business and we all know that you know referrals are just fantastic because you know typically the closing ratio on referrals it may be you know sometimes double that of just a regular lead would be. So without that I would say that that was the third driver.
Malcolm Lui: Okay. And just to be clear when you say organic growth you're referring to growth via referrals. Are you referring to other types of growth
Mark Sinatra: Yeah I'm referring to growth that was not from acquisition. So so growth that that really resulted from the marketing initiatives or salespeople doing a great job or service team you know exceeding expectations all of that
Malcolm Lui: Okay. So let me recap the three drivers and one. The first one was by providing a high level of service that in turn led to a high level of customer retention which in turn helped provide you with additional referrals and and as well as made it easier for your marketing to generate new opportunities for you. Which kind of goes into number two. Having a clear focus on who you want to target you shared between the two categories those that companies that realized need to build in-house. H.R. department or those that are already outsourcing H.R. but aren't fully satisfied but that's what they're getting as number two where the marketing. The third one was that you just felt your presence in the local market by proactively developing local partnerships and being involved with business groups and affinity groups. Did I capture those three drivers correctly.
Mark Sinatra: Yeah you did. Thank you Martin.
Malcolm Lui: Okay got it. Now what are your plans for the company for 2019
Mark Sinatra: Well for 2019 and I think we briefly touched on this. You know we are now part of I sold the business a little over a year ago. So now we're part of a larger organization. And so really the two goals would be to continue to integrate and assimilate into into that organization and to continue to grow. I mean what I see in the market is that there's still a tremendous need for both. H.R. compliance advice there's still a lot of complexity as relates to employee benefits you know where the job market is employers are are challenged now even more than ever to find and retain quality talent. And they really need. They need the services that we are there to to provide and help them with all of those goals so I think there's a lot of strength and at a macro level that supports the continued growth of what we do in this
Malcolm Lui: What type of revenue growth are you target targeting in 2018. What percentage growth are you looking for.
Mark Sinatra: Yeah. So you know for us I mean we're still focused strictly focus on double digit growth and of course you know just this is 100 percent organic growth. And so we're targeting 15 to 20 percent growth this year.
Malcolm Lui: Okay and what's the plan to get there from where you ended 2018.
Mark Sinatra: Continue doing more of the same. I mean we
Malcolm Lui: Okay.
Mark Sinatra: There's one thing that I I learned you know early on is is we there was a time when we we we spent a lot of time and resources on a variety of projects and initiatives and you know we had sales reps in across the country. And I think one of the inflection points is when I know it's kind of ratcheted that back in and said OK well let's let's just double down on what's working for us right. From a marketing and sales perspective that's when we started to see a lot of acceleration and sales momentum. So to answer your question it's really continue doing more of what's been working for us right now in the last couple of years.
Malcolm Lui: Can you be more specific as to what has been working for you or past couple of years I know you talked about the community involvement and you talk about doing some work. It's not related acquisitions. You can share a little bit about your marketing and sales initiatives that have worked well.
Mark Sinatra: Yeah. Yeah we're. Of course you know we. We're going to continue to be heavily involved and in certain you know I would say business owner association and affinity groups and be a resource for those groups as it relates to H.R. and an employee benefit topics. One thing we're going to also do is continue to refine our I would say our vertical focus. So you know I mean the business that we're in right. We serve a variety of companies across many different industries but what I found is we started to get to be more successful when we really honed in and had a customized messaging and service model to specific industries. Now one example would be health care right. I mean you know healthcare is a is a broad segment accounts for fairly you know about I would say 20 percent of our business. And so for this year we're going to continue to have again a customized focus and messaging as it relates to healthcare and medical related organizations
Malcolm Lui: Are there any particular challenges that you see that you need to figure out need to overcome to hit your growth target of 15 to 20 percent. Because arguably what you did last year might need to be fine. Because your your business base is growing so it becomes more difficult every year to maintain that level of growth.
Mark Sinatra: I think you know if I look back certainly several years ago you know the role of knowledge she has as change rated to become much much more critical for technology to have you know to play a key role obviously in cleaning service and satisfaction but also in the sales process. And you know one thing that we've noticed is there is a tremendous amount of H.R. technologies that are out there across all different points of the employee lifecycle right hiring timekeeping background checks payroll guitar performance reviews I mean et cetera et cetera I mean I could go on and on and I would say are one of the challenges and opportunities right to being ahead of you it is to ensure that we have a platform that continues to be. I would say flexible from an integration perspective where we can you know if there's a client that has you know maybe an applicant tracking platform that they really they've been using for a long time they really like. Right. They don't want to. They want to keep it. They like everything else we have to offer. Right. Being able to and be agile enough right to have some sort of API integration you know from that platform into our platform. Those are the types of things that are going to be really really key. As technology continues to play more of a role particularly for like a small to medium sized organizations
Malcolm Lui: Right.
Mark Sinatra: We can if we can be agile and creative you know we'll we'll we'll we'll have a positive outcome and those types of conversations. On the flip side right. If if it's a situation where we've got a product offering and and now there's not as much flexibility then you know we just have to be. We just have to be able to be comfortable with that and then have a focus on a certain particular type of client. But you know there may be business that like like I said that requires that certain level of agility out there. That's that's what I'm the last certainly in the last year or two
Malcolm Lui: Right. Okay from a marketing perspective I fired up my tools to see how you guys are doing and the ACL side. You guys are doing really well from my tools it shows that the traffic you're getting from ACL is worth fourteen hundred bucks a month right. Looking at the keywords you have to value those keywords. Well done on a paper click said I'm not seeing any advertising on that front. Is that something that you found hasn't worked well for you.
Mark Sinatra: Know what we. It's interesting question now what we determined a few years ago was that you know for four paperclip PPC right. We determined it was a game that your brother had to play big or just not play at all. Right. If you were you know operating in what I would call no man's land and having you know you would allocate some dollars to it every month. But but nothing significant at least relative to the larger players. We we were not getting the R Y you know we we tried really hard to calculate our y on everything we spend a dollar on. And that area in particular we just weren't getting it. And and after some time we determined that it was because we were not devoting enough financial resources to get that our why that makes any sense. It's just the scale scale game. And and so we made the decision that you know let's just focus on having really good content and a strong web site from a structural perspective and just try our best to optimize it from an NC from a CEO perspective I guess versus having PPC
Malcolm Lui: Right now has the SEO resulted in a steady stream of of leads that your sales team found were good leads qualified leads
Mark Sinatra: Oh yeah yeah I mean of course no of course there's you've got a link you just nailed it. You really have to vet and quantify what comes in. But you know off the top of my head I think it was 20 2017 we saw a sizable I want to say was about 85 percent or so increase in our traffic traffic to our website. Right. I mean it's significant. And then we saw a corresponding increase from inbound leads as well.
Malcolm Lui: Uk
Mark Sinatra: So again some of them you got a call through it and figure out what's a what's a solid lead and what's not.
Malcolm Lui: Yep
Mark Sinatra: But then I can tell you that that was definitely one of the drivers for our growth was was having that success.
Malcolm Lui: Right. Were you getting. Can you quantify how many quantity leads you're getting from your SEO efforts or was it several per day per week per month. If you have it off the top of your head
Mark Sinatra: We we got to get to a point I would say like pretty early on in 2017 I say 2017 because we we decided to really invest in all this stuff in early 2016. So it took us like you know again several months to year to really start to to get some good traction on it. But I'd say like in early 2017 we were consistently getting I would say like 25 to 30 like quality leads inbound on a monthly basis. And you know in our business you know when you have 25 to 30 inbound leads just based on the ratios you know you're going to get that typically will result in like three to four clients. And so even multiples top multiple times you know the investment from a dollars perspective that we're putting into it.
Malcolm Lui: Yeah that's that's a fantastic conversion rate and very good conversion rate. And at the same time it's a nice flow of quality leads to three final questions for you. One say staff 1 H.R. has a billboard on a freeway that's moving in the Texas area. What would your billboard say and keep in mind that people only have about six seconds before they drive by a billboard.
Mark Sinatra: Yeah that's a that's a that's a great question. I have not. I've not thought about that one. You know I have always thought you know we we this is we have something part of our website that's called H.R. score right and it's a it's a very high level tool that helps calculate you know really quickly what's the overall health from your company from an H.R. perspective. So just to give you a quick answer I would say you know what is your H.R. score. How
Malcolm Lui: Okay
Mark Sinatra: Are you do from any term perspective
Malcolm Lui: Right. All right. Got it. And my final two questions for you Who are your ideal clients. I know you touched on it a bit before maybe you can recap that. And what's the best way for them to contact your team
Mark Sinatra: Great. You know in terms of the ideal client it is really the companies that are at that inflection point when they've grown from being either a startup or they're looking to professionalize and implement some sort of infrastructure and really take their company to the next level. And they've realized that each are something that they would like to to be handled by a company like ours. And so what I mean a lot of different industries know we work with health care manufacturing professional services technology. All right. And again our average sized client is typically around 30 to 40 employees but our largest has a thousand in our smallest size five. So it means big big variation there. And then in terms of you know reaching out our website to great great source to to find out more information you know that's w w w dot staff one with a one spelled out. So staff or any dot com and take a look and then contact us through that. And we look forward to it.
Malcolm Lui: All right. Fantastic. Thanks for spending time with me today Mark and sharing how you grew your company's sales so quickly.
Mark Sinatra: Thanks Malcolm appreciate the opportunity.
Malcolm Lui: We've been speaking with Mark Sinatra, the CEO of Staff One HR, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.
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